Saturday, July 11, 2015

Missed Targets

We were somewhere on Auckland's North Shore when the bus ran out of diesel. Driver had forgotten to check the tank with the stick that morning. It was difficult to tell exactly where we were, as anything north of Takapuna and Glenfield looks exactly the same. Deepest suburbia, brick and tiled hills. No signs of life on the streets but the constant grind of traffic.

Auckland had grown so quickly in the last twenty years, most of these suburbs were farms in the 1980's. In the 1990's the Bolger government had the bright idea of loosening immigration criteria as a cheap way to pump skilled labour and someone else's capital into the economy. Cheap but not frictionless.

Brits escaping Thatcher/Major mingled with Afrikaaners fleeing the collapse of Apartheid in the ahistoric North Shore housing estates. Economic refugees fleeing Mugabe worked alongside political refugees from Iran and Iraq. Jews lived next to Arabs without all hell breaking loose.

Immigration consultants helped grease these wheels, including former Muldoon minister Aussie Malcolm and former Bolger minister for Immigration Tuariki Delamere. Their deep understanding of the law, as well as their contacts in the sector gleaned during years of public office, helped their clients squeeze the most out of NZ's immigrant points system.

In 2011, the Key government loosened the entry criteria. In essence, lump sum residencies were allowed. The easiest way to invest a lump sum once you arrive in the country is to buy property. That would explain when the Auckland bubble began to depart from the norm:

Bolger got away with it a bit in the 1990's, when NZers were still piling offshore to find a decent pay packet. The international student market was just taking off here, with ESOL schools not far behind. The only side-effect was giving Winston Peters a soapbox to bash him with.

But after the GFC, and a few years later when the bottom fell out of Australia's mining boom, Key's Auckland is fit to burst as natives stay put and new natives continue to pour in. The price is painfully clear.